Edited version of private advice

Authorisation Number: 1052332096883

Date of advice: 14 November 2024

Ruling

Subject: CGT - small business roll-over

Question 1

Will the Commissioner exercise the discretion in subsection 104-190(2) of the Income Tax Assessment Act 1997 to extend the replacement asset period to acquire a replacement asset?

Answer 1

Yes. Having considered your circumstances and the relevant factors, the Commissioner considers it appropriate to grant an extension of the replacement asset period.

This ruling applies for the following period:

Year ended 30 June 20XX

The scheme commenced on:

1 July 20XX

Relevant facts and circumstances

You entered into a contract to sell your business.

You chose to apply the small business CGT rollover made on the capital gain from the sale.

Under the terms of the contract, you were obliged to stay in business for a period of time after settlement to manage the business and you did not receive all of the sale proceeds until this time elapsed.

You have engaged business brokers to assist in acquiring a new business. They have advised they will be in contact with any properties that come to market and are within your financial capacity.

You have made various enquiries and signed confidentiality agreements to view information of potential businesses. You have also reviewed financial statements of potential businesses, and information memorandums, and arranged for meetings to discuss the purchase of a business.

You engaged your lawyer to draft a contract to purchase a business however it fell through as the seller eventually did not want to sell.

You have so far been unsuccessful in acquiring a replacement asset.

Relevant legislative provisions

Income Tax Assessment Act 1997 section 104-190

Income Tax Assessment Act 1997 Subdivision 152-E